Do you need business interruption cover?

Business interruption cover is designed to protect you against financial loss resulting directly from damage to property or commercial stock that causes your company to lose income because it cannot trade.

There are many issues that determine whether a company needs this kind of insurance cover; however, it basically comes down to whether substantial damage to your premises or stock would affect your ability to carry out your day-to-day business.
Broker

One of a broker’s many duties is to ensure that the client is not under-insured. They may use an expert auditor to assess the correct sum to insure with this cover and there may be serious consequences for all parties if this research is not carried out.

In the case of some sectors, such as manufacturing, the motor trade or even sole traders, this kind of cover is essential. Brokers such as motor trade insurers quote me today will be able to offer advice.

If you operate in this kind of industry, motor trade insurance with the appropriate level of cover may be the difference between surviving a major incident and going under. If damage to your premises or physical assets is likely to impact your ability to carry on trading, business interruption cover is vital.

The most frequent causes of claims for business interruption in the case of motor trade insurance are theft and – increasingly in the UK – flood and property damage. The cover also exists for other incidents that affect the ability to trade, such as storms and vandalism.

There are key exclusions attached, including riot or civil commotion, terrorism, pollution and contamination. Some insurers may be unwilling to cover other additional risks, which should be addressed through a separate and more specialist policy. Your broker will be able to advise on these exclusions.

The policy will include a business interruption indemnity period. The maximum indemnity period is the time the insurer will cover the business for whilst trading is interrupted, starting from the date of the incident. When choosing this period, be realistic about how long it may take you to get your business up and running again.

Always be aware that other insurances, such as buildings and contents, may not cover the loss of income arising from damage. Always check exactly what kind of cover your business is carrying.